OFFICIAL STATISTICS SPECIALLY DESIGNED FOR INDIAN STATISTICAL SERVICE (ISS) AND OTHER GOVERNMENT & PRIVATE SECTOR STATISTICAL EXAMINATIONS
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When the news says "24.82 crore Indians escaped multidimensional poverty in nine years," that number comes from India's National Multidimensional Poverty Index (MPI). Unlike an income-based poverty line, it counts the overlapping deprivations a household faces. It is a favourite of the Indian Statistical Service (ISS) paper setters and shows up in RBI, NABARD, SSC and university statistics exams. This guide gives you the concept, the method and three exam-style questions.
1. What is the National Multidimensional Poverty Index?
The National MPI measures poverty by asking how many deprivations a household faces at the same time, in health, education and standard of living. A household is counted as multidimensionally poor if it is deprived in at least one-third (33.33%) of the weighted indicators.
Why examiners love this topic
MPI links measurement theory, weighting, cut-offs and the Alkire-Foster counting method in one place. A question can be theoretical, numerical or a comparison with the global MPI.
2. Who publishes the National MPI and how?
NITI Aayog publishes the National MPI, following the Alkire-Foster methodology developed by OPHI and used by UNDP for the global MPI. The data come mainly from the National Family Health Survey (NFHS), which is why the index is updated when a new NFHS round is released. Note that the NFHS is conducted by the Ministry of Health and Family Welfare, not by NITI Aayog.
Dimensions
Three equally weighted dimensions: Health, Education and Standard of Living, each with weight 1/3.
Indicators
12 indicators: 3 in health, 2 in education and 7 in standard of living. Equal weights within each dimension.
Cut-off
A household is poor if its weighted deprivation score is 33.33% (one-third) or more.
Exam tip
The 12 indicators are nutrition, child and adolescent mortality, maternal health, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, assets and bank account. Learn them dimension-wise, since a paper may ask for the weight of one indicator.
3. The formula behind MPI
The Alkire-Foster method first identifies who is poor and then aggregates. The MPI is the product of two numbers: how many people are poor, and how deprived they are on average.
Here H is the headcount ratio (share of people who are poor), A is the intensity (average deprivation score among the poor), q is the number of poor persons, N is the total population and ci is the deprivation score of the i-th poor person.
- Strength: it captures the overlap of deprivations, and it can be broken down by indicator, region or group.
- Weakness: weights and the one-third cut-off are value judgements, and the index depends on survey data availability.
- Property to remember: MPI is not income-based, so it does not use a poverty line in rupees.
4. Headcount ratio at a glance (National MPI)
Notice the steady fall in the share of multidimensionally poor people. The last two figures come from different NFHS-based estimates, so treat comparisons across series carefully.
Headcount ratio in per cent, from NITI Aayog reports and discussion papers. Verify against the latest NITI Aayog release before quoting.
5. Global MPI vs National MPI: the comparison that keeps coming up
| Basis | Global MPI | National MPI (India) |
|---|---|---|
| Published by | UNDP and OPHI | NITI Aayog |
| Dimensions | 3 (Health, Education, Living standards) | 3 (same) |
| Indicators | 10 | 12 |
| Extra indicators | None | Maternal health and bank account |
| Poverty cut-off | 33.33% | 33.33% |
| Method | Alkire-Foster | Alkire-Foster |
6. Common mistakes students make
- Saying MPI is based on income or consumption. It is based on deprivations in non-monetary indicators.
- Treating the headcount ratio H as if it were the MPI. MPI = H × A.
- Writing that the national MPI has 10 indicators. That is the global MPI. The national one has 12.
- Saying that a household is poor if deprived in any one indicator. The cut-off is one-third of the weighted score.
- Attributing the survey data to NITI Aayog. The NFHS is conducted by the Ministry of Health and Family Welfare.
7. Three important questions on MPI
Try each one on your own first, then tap the answer.
What is the Multidimensional Poverty Index, and how is it computed from the headcount ratio and intensity?
Show answer
The MPI measures poverty through overlapping non-monetary deprivations in health, education and standard of living. It is computed as MPI = H × A, where H is the share of people identified as poor (deprived in at least one-third of the weighted indicators) and A is the average deprivation score among the poor.
In a group of 5 persons the weighted deprivation scores are 0.10, 0.25, 0.40, 0.55 and 0.80. Using the poverty cut-off of one-third, compute H, A and the MPI.
Show answer
Persons with a score of at least 0.3333 are poor: 0.40, 0.55 and 0.80. So q = 3.
H = 3 / 5 = 0.60 (60%)
A = (0.40 + 0.55 + 0.80) / 3 = 1.75 / 3 = 0.5833 (58.33%)
MPI = H × A = 0.60 × 0.5833 = 0.35
Check: sum of the censored scores / N = 1.75 / 5 = 0.35.
Explain the Alkire-Foster method used in India's National MPI. What are its advantages over an income-based poverty line?
Show answer
Write your answer in four parts. (a) Identification: each household gets a deprivation score, the weighted sum of its deprivations across 12 indicators in three dimensions. A household with a score of at least one-third is counted as poor (the dual cut-off approach). (b) Aggregation: the headcount ratio H and the intensity A are combined as MPI = H × A. (c) Advantages: it shows the overlap of deprivations, reflects the direct experience of poverty (schooling, sanitation, nutrition), can be decomposed by indicator, region and social group, and does not depend on price adjustments. (d) Limitations: weights and cut-offs involve value judgements, and it does not capture income or consumption levels. Conclude that the MPI complements, and does not replace, consumption-based measures.
Key takeaways
- The National MPI is published by NITI Aayog and uses the Alkire-Foster method with NFHS data.
- It has 3 equally weighted dimensions and 12 indicators, with a poverty cut-off of one-third.
- MPI = H × A: the headcount ratio multiplied by the intensity of poverty.
- Know the global versus national MPI comparison cold. It is a likely exam question this year.
Everything on Official Statistics, in one book
This topic is just one chapter of the syllabus. If you want the complete picture, this book is built for you.
- Indian official statistical system: MoSPI, NSO, NSC and the data they produce
- National accounts, GDP, IIP, price indices and labour statistics
- NSS surveys, sampling designs and data quality concepts
- Written specially for the ISS exam, and useful for other government and private sector statistical exams
- Concept-focused notes to revise quickly before the exam
Official Statistics for ISS and other Government & Private Sector Statistical Examinations